Circuit Breaker
قاطع التداول
A circuit breaker is an exchange mechanism that temporarily halts or restricts trading when a stock or index moves beyond preset thresholds. Its purpose is to pause the market during sharp swings so that new information can be absorbed in an orderly way. The Egyptian Exchange applies daily price limits to listed shares and can suspend a stock temporarily when those thresholds are reached.
Example
A share moving sharply on an unconfirmed rumour may be halted. Trading stops, the exchange seeks clarification from the company, and the pause gives every participant the same information before dealing resumes.
Why it matters
Halts exist to prevent price discovery from happening in a panic, when the loudest information is often the least reliable. They protect the process, not any particular investor.
A common mistake
Reading a halt as a verdict on the company. A pause is a procedural response to disorderly movement or pending news, and the price can resume in either direction once it lifts.